CHICAGO/NEW YORK, July 9 (Reuters) - More than $200 million
in customer funds appears to be missing from the accounts of
U.S. futures broker PFGBest, regulators said on Monday just
hours after the firm's founder attempted suicide outside the
company's Iowa headquarters.

The suicide attempt and missing money renewed anxiety over
the stability of the brokerage industry less than a year after
the collapse of much larger MF Global. PFGBest told customers
their funds had been frozen and clients would be allowed to
liquidate open trading positions, but would not be able to
withdraw funds or make new trades until further notice.

The National Futures Association (NFA), an industry group
that also plays a regulatory role, said it had issued an
emergency order to effectively freeze PFGBest's operations after
finding that a U.S. bank account the broker said contained $225
million in customer funds actually held only $5 million.

"It appears that PFG does not have sufficient assets to meet
its obligations to its customers," the NFA said.

The disclosure came hours after owner Russell Wasendorf Sr.,
a 40-year veteran of futures markets, was found in his car near
the company's new headquarters, having apparently attempted
suicide. He is in critical condition at the University of Iowa
Hospitals, according to local news reports.

PFGBest, which has brokered trades in U.S. commodity and
forex futures and options for 20 years, told clients it was in
liquidation-only status as "some accounting irregularities are
being investigated regarding company accounts."

"What this means is no customers are able to trade except to
liquidate positions. Until further notice, PFGBEST is not
authorized to release any funds," the note said.

PFGBest officials were not immediately available to comment.
Local law enforcement officials said the investigation would
soon likely pass to the U.S. Attorney's Office.

With about $400 million in segregated customer accounts,
less than a tenth the amount MF Global had when it filed for
bankruptcy, the fallout will be less severe. But the news still
sent shockwaves through the futures industry and added new agony
for some traders still missing money from MF Global.

"For the futures market, it's horrible," said James
Koutoulas, a commodities trader and president of hedge fund
Typhon Capital, who has led a campaign among former MF Global
customers to recoup their funds. "It's a crisis of confidence."

Koutoulas said he had nine accounts at PFGBest. His initial
instructions to traders were not to liquidate the accounts.
Instead, he will keep them open as long as he wants to be in the
trades. He will liquidate if he does not like the positions
before they are bulk transferred somewhere.

"WE'RE DOOMED"

One broker at PFGBest said that Wasendorf's son, Russ
Wasendorf Jr., briefed employees about the events earlier in the
day, saying that a suicide note had been found alluding to some
kind of financial troubles with the company. The younger
Wasendorf "sounded like he was in another world."

"Everybody here is obviously in shock," said the broker,
adding that some employees had begun packing up shortly after
the announcements. "Pretty much everybody around here said we're
doomed."

One former employee of the firm said he had grown concerned
that Wasendorf did not do more to distance the company from a
massive $194 million forex-trading Ponzi scheme run by Trevor
Cook in Minnesota, who admitted defrauding more than 700
investors. Cook is serving 25 years in prison.

In February PFGBest, which had acted as Cook's broker, was
fined $700,000 by the NFA for failing to notice the scheme. The
company was subsequently sued for $48 million by the receiver
rounding up the assets from Cook's scheme.

The NFA said on Monday that on June 29, PFGBest clearing
unit Peregrine Financial Group (PFG) told the NFA that it held
$400 million in customer segregated funds, of which more than
$225 million was on deposit at an unnamed U.S. bank.

But on Monday, after receiving information that PFG's
founder and owner may have falsified bank records, the NFA said
that only $5 million was on account at the bank days earlier. It
also said that previous bank balances from February 2010 and
March 2011, reported in excess of $200 million, may in fact have
held less than $10 million at those times.

FROM BASEMENT TO COMPOUND

PFGBest is far smaller than the big investment banks that
dominate the brokerage business, but was among a dozen or so
well-known independent firms that tended to cater to local
traders, farmers or smaller market players.

Russell Wasendorf Sr. started as a commodities trader in the
basement of his Cedar Falls home in 1972, offering seminars and
educational programs to other traders. In 1990 he launched
Peregrine Financial Group, which would become PFGBest, and was
an early promoter of electronic trading systems.

He expanded the business in the late 1980s after making a
windfall profit for himself and customers by advising them to
short the financial futures market 10 days before the "Black
Monday" stock market crash of 1987, the firm's website says.

The firm grew significantly over the past decade, opening
offices in Canada and Shanghai and buying smaller rival Alaron
in 2009. It also moved its headquarters from Chicago back to a
purpose-built facility in Wasendorf's hometown of Cedar Falls,
with plans to accommodate up to 300 employees.

It was outside the firm's 50,000 square-foot, three-story
glass headquarters - an $18 million structure that was
celebrated for its eco-friendly construction and four-star
employee cafeteria - that local authorities found him shortly
after 8 a.m. local time.

The Black Hawk County Sheriff's Office responded to a report
of a suicide attempt and transported the victim to the local
hospital, Sheriff Tony Thompson said. He declined to identify
the victim or say how the victim had attempted suicide.

The county sheriff will likely pass the investigation over
to the U.S. Attorney's Office within the next 12 hours "based on
the nature of the investigation," Thompson said. He said he
could not release additional information.